The Christmas holiday brings with it a feeling that is almost indescribable. Most people experience a lot of joy during this period and it is thanks to the unified idea that the season ushers in a new beginning.
The season is also cheerful because it marks the end of the fiscal year. Schools and businesses shut down for the year as they prepare for a fresh start. This presents people with the opportunity to refresh and or have some fun.
Fortunately, most formal corporations are quite aware of this and they typically make provisions for their employees’ to enjoy the holidays and refresh via their annual Christmas bonuses.
Unlike a salary, a bonus feels like a gift, a monetary reward that was not directly earned. In simple terms, it feels like free money, and if you know anything about free money, it is the fact that it is easy to squander.
Christmas bonuses often feel like an illusion of excess and this is due to the fact that it is indeed just that, an illusion of excess.
Regardless, it still is money, and money must be utilized one way or another, your Christmas bonus is no different. So the question here is, what is the smartest way to utilize your Christmas bonus?
Below are five things to do the moment you receive your Christmas bonus
Put it in the budget: If you are very good with your finances, chances are you already created a monthly budget for the beginning of the new year so you don’t end up over spending during the holidays. But given that bonuses are subject to management’s decision it is typically unclear how much, if at all, it would be each year, so you didn’t include it in your budget. If that’s the case, once the bonus is paid, it’s time to readjust the budget, giving you more financial flexibility. You want to add somewhere around 30-40% of the bonus in your new year budget.
Invest: As much as you don’t want to involve yourself in any work related activities during the festive season, it is a good time as any to make an investment. Add some of the bonus money to your side business’s capital, or buy some shares on the stock exchange, whatever the case maybe, put some of that money into something that could potentially yield some returns.
Buy yourself a gift: All work and no play makes jack a dull boy, this is particularly true in this case. The bonus is a reward, so it would be remiss if you didn’t use some of it to get yourself a gift. Reward yourself a little as a reminder why you’ve worked so hard all year round.
Give to charity: This is subject to personal preference and belief, but seeing as it’s the season of giving, there is no better place to draw funds from than a bonus. As mentioned earlier, bonuses are indirectly free money that may or may not even be paid. So now that you have it, taking a little from it to aid a noble cause, may not be such a terrible idea.
Fund your miscellaneous expenses: It could be an outstanding debt, or an emergency fund, but it is advisable to take some of your Christmas bonus and put it in a separate account for unplanned events. It’s always comforting when you have a means to handle an emergency. So as a savvy individual, some of your Christmas bonus should go to funding your miscellaneous account.
PS: This list, as mentioned earlier is not an ultimate protocol but suggestions that could be helpful. Not all bonuses are built equal, so your application of these tips greatly depend on how generous your organization chooses to be at the end of the year.
